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QUESTION
4. Suppose you bought a 7% coupon bond one year ago for $1040. The bond sells for $1070 today. Assuming a $1000 face value, what was your total
4. Suppose you bought a 7% coupon bond one year ago for $1040. The bond sells for $1070 today. Assuming a $1000 face value, what was your total dollar return on this investment over the past year? What was your nominal rate of return on this investment over the past year? If the inflation rate last year was 4%, what was your total real rate of return on this investment? Show your work.
